Hi there, and welcome to your business the show dedicated to helping your growing business. Michael dorn is an entrepreneur and urban wine make another created a stateoftheart music venue and fully functioning winery in the heart of the city. The idea hit a few snags, but after working out the kinks, this entrepreneur is making the leap. Expanding his business to several big cities with many more on the way. Michael dorf is a modernday impressario, with a passion for food, wine and music. He thought this would be a golden combination for a business concept. City winery. An expensive operation to run, his new restaurant concert venue winery was highly dependant on the idea that deeppocketed new yorkers would be interested in owning their own barrel of wine. So the original wine side of the business was predicated on selling barrels of wine to really wealthy bankers. And i had presold about 150 barrels, gotten people to sign up to make a barrel. It was going to be about 13 12,000, you would get your 250 bottles, private label. He was hooked . Our first grapes arrived the same week Lehman Brothers imploded and it was financial armageddon. None of the people who signed up to have this luxury barrel of their own wine wanted to be showing off. Suddenly his business idea was dead in the water. He had all his money tied up into those barrels waiting to be sold to customers, who were frankly, just not interested. I was a little bit of a freakout. 300 barrels, at 12,000 a barrel, you can do the math of what we were expecting to come in. And the wine started to show and i said to the wine maker, we got to start selling this. And hes french. And great wine maker and a real artist and business person. He goes but michael, the ttb, we need to get the approval. I was like, we got to sell this. Michael was desperate. He needed to do something to bring in revenue. And so he suggested the unthinkable tap the barrels. Skip the whole step of putting wine into bottles and serve it right from the barrel in the restaurant. His wine maker David Lecomte was horrified. You stupid american, you cant put gas in a barrel, it will blow up. Im like, we got to sell this wine now, its cash flow. David soon came around to the idea. After all, it was more environmentally friendly and the wine would always be fresh. For me as a wine maker, it makes sense. We were the avantgarde. It turned out the new plan was better than the original one. We started putting it in stainless steel beer kegs and started tapping wine. In the beginning it started to work. When we put it behind bare heads and dressed it up. All of a sudden it started to fly it became a home run. Our wine by the glass became 70 of our wine sales and we were like wow, the margins are way better than selling it to the barrel to bankers, lets sell it by the glass to our patrons. City winery was way ahead of the curve. The authenticity of the place with its steel fermenting tanks and oak barrels with your favorite Sauvignon Blanc or pinot noir made it so much more authentic than your typical wine bar and they paired it with music. Musically whats happening is very exciting. Ten years ago artists would still go on tour as a way to sell records. Today, no one is make any money selling records. The only real money is in the live performance, and to have an intimate experience with an artist, becomes very precious. Wesley stakes, otherwise known as John Wesley Harding has had a long music career. But his soldout cabinet of wonders cabaret show at city winery is one of his favorite gigs. I think were up to our 92nd show. The whole idea of a comfortable evening out with good wine and good food is a good deal, too. The way our show is run here, is tribute to the fact that theres a certain kind of thing that is perfect for this place. Dont blink because in an instant, city winery has one more trick up its sleeve. This welloiled machine quickly transforms, sometimes running three or four simultaneous special events in just one evening. David says the profitability of the business is like a table. Each department is a leg. Wine, music, food and events. And they all need to work in harmony for the business to balance. If one of these three legs is not you know, performing well, it doesnt stand long. And its falling. You cannot only be good in one thing. You have to be good in at least three or four to make sure that this is going and growing. With the concept fully flushed out in new york, theyve managed to successfully duplicate the formula, opening city winery locations in chicago, nashville and atlanta. With just one painful hiccup. Our biggest mistake as a company so far has been napa. We opened in napa for a year and a half. We got handed the most beautiful opera house. My son at the time said dad, doesnt city winery require a city . And youre right. You know we put a lot of money into this project and it, napa is a small market. We werent unique the way we were in new york or chicago or big city. With this important lesson learned, city winery is making the leap with new venues opening in boston, washington and more planned internationally. I want to see how far this can go. Were going from 750 employees this year to 1,000 by the end of the year, thats full and parttime. Im excite by that growth. It took nine years to go from zero to 50 million. Its really exciting to me, i love the process of building. Every entrepreneur has an idea in mind when they start their company. But being married to that concept and that concept alone doesnt always work. One savvy Business Owner made a big change when he noticed his customers buying a lot of beer tap handles. Products that werent even part of the original plan. When you get customers calling every day, its hard to turn them away. You know . Nice people. Want do give you money. I think its a good thing. Mark supic never could have guessed what his bestselling product would be when he started his Small Business in 1981. 20, 30 years ago, beer taps didnt play that big a part in the retailing of beer. And my feeling is that now its a huge part. I think something weve been very lucky to have this market find us, you know. This market grew around us. The owner of mark suphic and company in baltimore, maryland, says his clients are the reason he decided to sell his nowpopular customdesigned wooden beer tap handles. Before this, the customer demand was not that high. It kind of came in the back door, it was an aside and we made them because it was a good fit for us. Mark originally focused on carpentry work, building pieces like cabinets for homes. But conversations with other small Business Owners pushed him in another direction. I had a couple of local brewers come to me and said we want a tap handle. We made it for them. And thats where that took off. So the beer taps, i just started doing sales work. Rather than drag his heels, mark recognized the potential. Fortunate will making beer tap handles didnt require a major pivot in production. It wasnt difficult, we just did more of what we were doing. There was plenty of woodturning being done on site. We make beer taps, which are primarily latheturned. They go directly to the breweries. We do millwork, which is primarily latheturned. We make stair parts, newels and spindles and handrails. The team figured out a way to accommodate all customers, especially newer ones. The answer was to simplify the design. We are a wood shop and were trying to focus on a definite line of handles. That say a novice brewer can come in and say i want that handle. That suits me. Or i want that handle, but maybe well just change it a little bit. Thats worked out real well for us. Customers know that theyre being heard. Brewer steven, the owner of raven beer has a standing order. But he can always call with a request. Hell go out of his way. I think thats typical of a Small Business person. You know, the customer comes first and youll spend the extra time to go out of his way. And im not talking about hundreds of tap handles. If i need 10, 20, whatever, hell go out of his way to supply them. With customers nationwide, marks son, john, says the company has reimagined its production by becoming more efficient. Really getting more orders than we ever really had. So it was really just by necessity to get it done and to really keep from banging our hids against the wall. Staff has increased and when necessary, manpower can shift. Really sort of compartmentalized each one. We have employees who really work on only tap handles. We have employees who only work on custom work. Joseph supik, marks nephew, believes the company has found a way to balance their workflow. Were fairly flexible with a lot of the stuff we can do, so we can adjust for customer nand as needed. Demand for beer taps has been steady. Those customers have given the business stability at uncertain times. When the millwork has fallen off, weve been able to fill in the gaps with that. The decision to grow the beer tap handle line has worked out so well that sales for the product now account for more than 50 of business. The one catch about following customer demand is that the business is headed in a direction that mark didnt predict. He admits that making the tap handles can be a bit repetitive. Its not stimulating. So we try to move people around and we try to you know make things interesting. That being said, clients are speaking with their dollars. And weve seeing companies that weve been dealing with for years, their demand for tap handles has increased. They would ask for a small batch in the beginning and now their batch is like once a month. Its interesting to see not only our business improve, but their businesses improve as well. Thats why there are conversations about ways to increase production across the board. Since the millwork side is plenty busy, at any time like we do less millwork. The percentage isnt going to change, everything will be elevated. Well just do more beer taps. The demand seems to be here to stay and the staff keeps a watchful eye on work flow to make sure every order is priority number one. We all want more visitors to our websites, entrepreneur magazine gives us five easy ways to get them. One, a blog can help you drive traffic to your site and give your visitors a taste of your brands character and voice. But make sure you have a plan in mind. You need to do it well and often in order to add value. Two, become a thought leader. Establish yourself as an expert in your industry, by speaking at conferences and attending networking events. Three, change up your email strategy. Use sites like mail chimp, boomerang and mail track to improve the quality of your email responses and followup. Four, form a partnership. You can align yourself with a successful business, find ways that you both can benefit from the relationship and tap into each others customer base. And five, become a social media master. It doesnt have to be brain surgery. On whatever platform your target audience frequents, start a conversation and keep it authentic. All fastgrowing companies have one thing in common they built products or provide a service that in the eye of their customers are simply musthaves. What can you do to harness your strategy. Shawn ellis is the founder and ceo of Growth Hackers. Com. He is coauthor of the new book hacking growth. How todays Fastestgrowing Companies drive breakout success. Good to see you. Before we start, just define Growth Hacker for me. Yes so Growth Hacker or growth hacking is really about understanding the full Customer Journey and doing testing across that entire Customer Journey. And contrast that with the typical marketing, which tends to be more externally focused, just on Customer Acquisition and channels. So growth hacking takes it to a level where its focussed on all of the levers of growth and effectively having a team Work Together to test across those levers. I want to go through some of your tips. It takes people on this journey. The first one you talk about is understand your musthave benefit. Dont you think when most companies launch a product or start, they understand that . Or no. No, its surprising that a lot of companies, when they launch a product, they have, an idea in mind of the value of the people are going to get from the product. But when people actually use it, a lot of times they actually get more benefit from something that was unanticipated. So its really important to crowdsource that from your customers and try to make sure that you first identify which customers consider the product a must have. And dig into why they consider it a musthave. What is the benefit theyre getting from the product. And with that information you now have a finish line as youre acquiring new users. You want to bring them to that experience that delivers that musthave benefit. Number two you talk about determining a key growth metric. It seems obvious, right, is it revenues, is it sales, is it users . What i have found is that people in charge change that key growth metric when the one they originally picked isnt working. So at first its users and they say were not getting users fast enough. So it is visitors. And then were not getting visitors fast enough. If you cant get to your first one, do you have to stick to it . Or do you say this is going to be slower than i thought and im going to think about it in a different way. I the mix take that some Companies Make is theyre focused on a business metric, or a business outcome. Where what really drives Sustainable Growth is the customer value. We talk about the musthave benefit that customers get from a product. How do you quantify that benefit in a single metric that over time, that metric is going to be a much better indicator of Sustainable Growth. If youre delivering value, people are going to come back and want more of that value. So so maybe repeat its not your typical business metric. Repeat usage from your current customers . Kind of the best example of that i could think of would be airbnb, they have for their, in the growth hacking world, we call it a north star met rick. For their north star metric, it would be nights booked. So thats, theres benefit for a host and theres benefit for a guest every time a night is booked. So the more nights they have booked. The more value is being delivered. And the more likely that that growth is going to be sustainable over time. Got it. Build crossfunctional growth team. You take people from marketing, et cetera, and say you guys are the growth team . Right. So this is what, whats pretty cool on facebook really pioneered this. Since the time they pioneered it, theyve built about another 400 billion in value in the business. And its this idea that testing across all of the levers of growth is really challenging, because a lot of the people who control levers that sit within product for example, are not going to be the marketing team. So what you want to be able to do is have the crossfunctional team that has permission to test reallier in that can affect growth. And yeah so thats the big benefit is that by having this crossfunctional team, it includes marketers, potentially designers, engineers. Data. A data analyst. But being able to bring together a group of these skills that have permission to test acrosser in in the business to drive growth can be really effective for being able to unlock growth in areas that maybe are a little less obvious than just going out and spending more money on advertising. The other two is optimize full Customer Journey and test across all growth levers. It sounds to me that when you were talking about this, you were talking as much about a mindset as anything else. Does that theres definitely a mindset. Its this Continuous Improvement mindset where you know everything that youre doing, particularly when it comes to optizati optmization, theres a better way to do it. And to see what the impact from that testing is on your north star metric. So any test that expands value being delivered to customers, is going to be a successful test. When i hear the word hacker, or hacking, when you hear hack, you think they are tricks, right . Tiny things that i can do to change everything and make it better for me. Are there any tactics that people these are big organizational things . Right. This is really hacking in the sense of Just Creative problemsolving. So its, so like engineering is another sort of hacking synonym. So ultimately its about being able to use whatever resources that you have to come up with Creative Solutions to the problems that are holding back growth. Great, shawn, so good to talk to you, thank you so much for coming on. Thank you, j. J. , i appreciate it. When we come back, we answer your questions on how to make key hires when scaling your business. And well see if this weeks elevator pitch for a lactosefree ice cream product mooves our judges. Will your business be ready when growth presents itself . American express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. Find out how American Express cards and services can help prepare you for growth at open. Com. What are some key hires that an Early Stage Company should make in order to most effectively scale their business . So in an Early Stage Company, your key hires are so important. It will depend which type of company you have. The types of companies that ive been involved in and what we did at fitz. My recent startup is focusing on operations and marketing. If you think of supply and demand, those are so important in businesses that have some sort of product you are selling or marketplace service. Find a rock start marketer and rock star ops person. Frj hi, im katie. Im gwenn. Im part of the 2 3 of World Population that suffers from inn toll convenience. I had to eat regular ice cream and suffer the issues. No ice cream offered the traditional. Recognizing this, we created minus the moo. We use all of the same ingredients as the real ice cream, but lack the enzyme to make it lactose free. We had exciting traction in retailers like whole foods and other independents. We scaled production and partnered with the largest food distribute aftor in the country. We are raising 50,000 to put toward working capital to introduce our brand into t